Which are the great economies of the world? That's easy enough--think North America, Western Europe and Japan, because the three areas together claim roughly 80 percent of the world's wealth. But do you know which economies will top the list 30 years from now?
Jeffrey Rosensweig says he does. His theories are detailed in Winning The Global Game (The Free Press), released last month. The professor of international business and finance at Emory University's Goizueta Business School in Atlanta explains the reasoning behind his ranking of the 21st century's so-called "Big Six"--The Americas, China, Europe, India, Japan and ASEAN, the Association of Southeast Asian Nations. "The traditional triad [of North America, Western Europe and Japan] is a good market," Rosensweig says. "But the real excitement as we move into the 21st century will be the emerging markets."
Rosensweig is confident of his predictions despite the recent economic turmoil in numerous developing Asian nations. "The effects will last a few years, but by 2005, [Asia's] going to be an industrial and exporting powerhouse. It will have recovered fully," he predicts.
Probably the foremost trend driving Rosensweig's economic model is the banding together of the once-separate nations of the traditional triad to form larger regional economies. For instance, Rosensweig expects renewed momentum toward a "free trade area of the Americas" to occur sometime in the next decade, which would link Latin America to North America. And he says Western Europe is sure to expand and embrace the key economies of Eastern Europe. According to his theory of progression, such economic integration is the logical next step for these powerful economies.
Rosensweig's formula for selecting the future top economies is based on three distinct elements, the first being a huge population. Consider India and China, two economies in Rosensweig's Big Six: India's population numbers 980 million to date and is increasing at a staggering 18 million people per year, while China's population tops 1.25 billion. In fact, Asia as a whole accounts for 59 percent of the world's population.
The expected emergence of adequate consumer purchasing power and a track record of solid economic growth are the other two elements of Rosensweig's formula. As these Big Six economies strengthen, developing markets will create windfalls of opportunity--especially to entrepreneurs in infrastructure industries such as communications, computing, electric power and health care--as the race to further industrialize their countries moves forward. "So even if the majority of the population is relatively poor," says Rosensweig, "I could confidently predict they would be entering what we would consider to be a kind of lower middle class in the next decade or so."
It all boils down to a global strategy he describes as "time-phased." Entrepreneurs seeking future international success must learn to adjust to the march of time and the changes it will bring. Prepare now for the fact that the best markets for entrepreneurs today may be eclipsed by the key emerging markets in the 21st century. Rosensweig sums it up like this: "Right now, we're in the Latin American decade, on the road to the Asian century."